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Today’s Rates for First Time Homebuyers in Arkansas

Monday, March 19, 2018

Mortgage rates are at 4.62% for the 30 year fixed loan program and at 3.72% for the 15 year fixed. As for variable rates, the 5/1 ARM rate currently stands at 3.83%. Check out FHA and VA rates as well if you are doing low or no down payments.

Arkansas First Time Home Buyer Checklist

Decide on your loan program options. If you're moving to an eligible area, you may qualify for a zero down payment loan through USDA. Veterans may be eligible for VA loans, which do not require cash down. The content in the paragraphs below should give you an idea of where you may fall.

Get familiar with your credit score. Your credit should fall somewhere above 600, but few lenders accept scores in the high 500s. If your credit score needs a boost, work on improving it before you try to take out a mortgage. Once annually, you're able to request a free credit report from the three major credit bureaus.

Shop interest rates from different lenders in your part of Arkansas. Choose one who not only provides a great offer, but carries a high rating from the Better Business Bureau.

Get pre-approved. Once you've picked a lender, provide income documentation with your last two pay stubs and tax returns from the past two years.

Determine a budget. You could be pre-approved for a loan amount that is bigger than you had anticipated, but do not base affordability on the sum provided. Remember - pre-approvals are not guaranteed, and only you know what you can truly afford.

Begin home shopping. Be sure to avoid making extravagant purchases, taking out new installment loans, or anything else that could weaken your financial standing. Lenders will check your accounts again before closing your loan.

Low Down Payment Loans Through FHA

If you’re a first time home buyer without a lot to put down, an Arkansas FHA loan may accommodate you. FHA loans are backed by the government and designed to help home buyers with limited upfront funds receive financing.

Down payment: 3.5%

Minimum acceptable credit score: 580 (varies)

Mortgage insurance: Upfront (1.75% loan amount) and monthly

Property guidelines apply and are verified via home inspection

You can find additional information about FHA loans on the Arkansas page of the FHA website.

No Down Payment Loans Through USDA

The United States Department of Agriculture backs home loans for zero down to Arkansas home buyers looking to move to or live in rural areas. Find out if your buying city is eligible by searching the USDA's website. Note that areas like Little Rock are not eligible.

Down payment: None required; financing up to 102% available depending on home appraisal

Minimum acceptable credit score: 620

Mortgage insurance: Upfront (2% loan amount) and monthly

Income maximums apply

Arkansas Grant and Assistance Programs

The Arkansas Development Finance Authority (ADFA) offers the HomeToOwn program for first time home buyers who meet income and other criteria. Through the sale of tax-exempt mortgage-backed securities (bonds), the ADFA is able to provide lowered interest rates to participants. Also available is down payment assistance, through the financing of a second mortgage. The loan can cover down payment and closing costs, up to $6,000. A home buyer counseling course is required for participation.

ADFA has a Mortgage Certificate Credit (MCC) tax credit program for eligible borrowers. The tax credit is not a loan, but a home buyer incentive that reduces the dollar amount withheld from their pay check for federal income tax every month, freeing up to $2,000 in annual funds. The funds can then go toward monthly mortgage payments.